Pan Asia secures $1.5m lifeline to help keep the lights on
Coal explorer Pan Asia has managed to secure a $1.5 million loan to help keep its lights on.
The struggling junior had just $43,000 worth of cash in the bank at the end of the December quarter and estimated a cash burn of $90,000 for the current quarter.
To add to its woes, Pan Asia (ASX:PZC) has faced difficulties in raising cash.
The company initially failed to sell the majority of the shares on offer in a capital raising it undertook in September and the shortfall was rejected by its underwriter — which is controlled by Pan Asia’s chairman, Peter Chai.
Mr Chai was set to control 55 per cent of the coal explorer after his underwriter was supposed to mop up the remaining stock.
Since May last year, Pan Asia’s stock has slumped 75 per cent from a 52-week high of 0.8c to 0.2c.
Pan Asia initially only raised $55,442 under the 1-for-1 rights issue, but now says it has increased that to $820,927.
The company has also now managed to lock in a 12 per cent interest-bearing loan from New Emerald Coal that is due for repayment by February 21, 2019.
Pan Asia has allocated $200,000 to project costs, $500,000 to repay existing creditors and $506,661 for working capital.
The company previously announced it had entered into a binding but conditional term sheet to acquire New Emerald’s coal assets. Pan Asia is also in the process of selling its TCM project in Indonesia.
Pan Asia has now been suspended from the ASX while it works to re-comply with the bourse’s listing rules.
The company has been contacted for comment.